Log in/Register

Please log in or register to continue. Registration is free and requires only your email address.

Log in

Register

Emailrequired

PasswordrequiredRemember me?

Please enter your email address and click on the reset-password button. You'll receive an email shortly with a link to create a new password. If you have trouble finding this email, please check your spam folder.

Latin America’s Education Deficit

China’s decision to end its decade-old policy of pegging the Yuan to the dollar has been greeted in Latin America with enthusiasm and optimism. It is argued across the continent that a more flexible exchange rate for the Yuan will reduce China’s unfair advantage in international markets. This, we are told, will make Latin America’s exports of manufactured goods more competitive internationally.

But this optimism is misplaced. Despite the announced reforms, it is unlikely that there will be any significant exchange-rate flexibility in China’s currency. Indeed, China’s rulers have already stated that the new exchange-rate system will aim at maintaining currency stability. Its policy is tailored after that of Singapore, which has avoided large currency fluctuations – and has maintained a significantly more competitive exchange rate during the last three years than all of Latin America’s countries.

This means that in order to compete successfully with China, Latin American countries will need to increase productivity growth. Unfortunately, the continent is not well positioned for these challenges.

To continue reading, please log in or enter your email address.

Registration is quick and easy and requires only your email address. If you already have an account with us, please log in. Or subscribe now for unlimited access.